Monday, November 01, 2010

Quality Discount Generic Pharmaceutical Stock

Par Pharmaceuticals
Make Money with Generic Drugs

The trend is your friend and the stock market still looks up for the moment, although I’m looking for a pull-back of some kind. With volume as low as it’s been this year, I think it looks like investors are being very cautious in cash, while fund managers and other wall-street experts are saying everything is ok to buy. Maybe these pro’s don’t want to lose their jobs with the lower fund inflows this year like many main-street folks have been un-employed these past two years.

Good Value Drug Company

I’ve got a buy recommendation this week on Par Pharmaceutical Companies. Their earnings report is coming out this Wednesday November 3rd, so get ready for that to commit to a buy long position or not if they come in with some weak earnings.

Tetrahydrocannabinol and Many Other Drugs

Par Pharmaceutical is valued at about $1 billion and develops, manufacturers, and markets a number of generic and proprietary drugs including Dronabinol, a form of Tetrahydrocannabinol or THC. If Marijuana gets legalized they might be a beneficiary with Dronabinol, but this is a very small part of their overall business with their many other drug pipelines.

Good Valuation for Continued Growth

Par Pharma has a PE ratio of about 13 which looks of reasonable value currently, and their balance sheet is very healthy in itself with its very low debt to equity ratio. Their 5 year EPS growth rate has averaged 14.43 over the industry average of 9.00. The bottom line on Par Pharma’s fundamentals is that currently its selling at a decent discount to the rest of the industry.

New Drug in Their Pipeline

Par Pharmaceutical reported last Tuesday it’s now shipping a generic version of the cold and cough treatment Tussionex after getting final approval from the FDA. Par said U.S. sales of this drug are about $200 million plus.

Buy Long Par Pharmaceutical – Ticker PRX

Buy Entry: 30.00 to 32.50

Stop-Loss: 29.00

Take Profit Areas: 35.19 to 35.54, 37.19 to 37.62, 39.79 to 40.23

Par Pharmaceutical Company Profile

Par Pharmaceutical Companies, Inc., through its subsidiary, Par Pharmaceutical, Inc. engages in the development, manufacture, and distribution of generic and branded drugs in the United States. Its principal generic products include Metoprolol succinate ER, Sumatriptan succinate injection, Meclizine Hydrochloride, Clonidine TDS, Dronabinol, Cabergoline, Propranolol HCl ER, Cholestyramine Powder, Methimazole, Megestrol oral suspension, Tramadol HCl and acetaminophen tablets, Fluticasone, Ibuprofen Rx, and various amoxicillin products. The company offers its drugs in solid oral dosage forms, such as tablets, caplets, and two-piece hard-shell capsules; oral suspension products; nasal spray products; products delivered by injection; and products in the semi-solid form of a cream and a transdermal patch. Its brand products include Megace ES drugs for the treatment of anorexia, cachexia, or any unexplained significant weight loss in patients with a diagnosis of AIDS; Nascobal Nasal Spray, a prescription vitamin B12 treatment indicated for maintenance of remission in certain pernicious anemia patients, as well as a supplement for various B12 deficiencies; and Androgel, a testosterone gel indicated for replacement therapy in males for conditions associated with a deficiency or absence of endogenous testosterone. Par Pharmaceutical plans to launch Zuplenz, an oral soluble thin film formulation for the prevention of chemotherapy induced nausea and vomiting, and post-operative nausea and vomiting; and Oravig, a miconozole antifungal therapy for the treatment of oropharyngeal candidiasis. It markets its products to wholesalers, drug store chains, supermarket chains, mass merchandisers, distributors, managed health care organizations, mail order accounts, drug distributors, nursing homes, hospitals, clinics, government agencies, and pharmacy benefit management companies. The company was founded in 1978 and is based in Woodcliff Lake, New Jersey.

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Click the Par Pharmaceutical stock chart below for a larger view.

Par Pharmaceutical Stock Chart